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Paying More for Primary Care: Can It Help Bend the Medicare Cost Curve?

Commonwealth Fund Issue Brief
March 2012
James D. Reschovsky, Arkadipta Ghosh, Kate A. Stewart, Deborah Chollet

The national health reform law includes a temporary five-year, 10-percent increase in Medicare payments for primary care services. The law defines these services as office and other ambulatory visits furnished by primary care physicians—including family practice physicians, general internists, geriatricians, and pediatricians—as well as nurse practitioners, clinical nurse specialists and physician assistants. Using a simulation model with real-world parameters, researchers evaluated the effects of a permanent increase in these fees. The analysis shows the fee increase would increase primary care visits by 8.8 percent and raise the overall cost of primary care visits by 17 percent. However, these increases would yield more than a six-fold annual return in lower Medicare costs for other services—mostly inpatient and post-acute care—once the full effects on treatment patterns are realized. The net result would be a drop in Medicare costs of nearly 2 percent. These findings suggest that, under reasonable assumptions, promoting primary care can help bend the Medicare cost curve.

This report, written by researchers at HSC and Mathematica Policy Research, is available at the Commonwealth Fund Web site by clicking here.





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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.